In a new report from Redfin, the technology-driven real estate brokerage, it was revealed that the median price of a U.S. home sold during the four weeks ending on July 16 stood at $382,500. This figure reflects a substantial 2.1% rise compared to the corresponding period in the previous year. Notably, it marks the most significant increase since December 2022 and represents the second consecutive uptick in prices after almost five months of continuous declines.
Housing prices are rising in some metro areas like Milwaukee but declining in others like Austin and Phoenix, where prices had soared during the pandemic.
Record-Breaking Home Prices and Mortgage Rates Result in a Typical Homebuyer’s Monthly Payment of $2,656. Although daily average mortgage rates are slightly decreasing due to cooling inflation, housing payments are expected to stay elevated. Lower rates could fuel competition for the limited homes on the market, pushing prices up in the foreseeable future.
Rising prices are driven by high demand and limited supply. Redfin’s Homebuyer Demand Index is up 2% from last year while pending home sales have decreased by 15% and new listings by 25%. Total homes for sale have dropped by 16%, the largest decline in a year and a half, along with an unseasonal monthly inventory decrease. Low mortgage rates have caused homeowners to hold back, exacerbating the supply shortage.
Buyer concerns about high mortgage rates are leading to bidding wars in certain market areas due to limited and attractive choices. Condos, townhouses, and new construction homes are selling quickly as they require less work, which is a challenge given the high monthly mortgage payments. Buyers are adjusting their budgets, seeking smaller homes, and exploring creative options like rate buydowns or larger down payments to reduce monthly expenses.